Oil rises, stocks dither amid Middle East developments

The developments sent Brent futures rising more than 2% in Asian trade to $98.21 a barrel

Oil prices rose on Tuesday and stocks dithered as investor optimism over an imminent Iran-U.S. peace deal was tempered ‌by new U.S. strikes in the Middle East.

U.S. conducted strikes, as Tehran’s top negotiator and its foreign minister were in Doha for talks with Qatar’s prime minister on a potential deal with Washington to end the three-month-old war.

Also, U.S. Secretary of ​State said negotiating a deal with Iran could “take a few days”, quashing hopes of an imminent end to the ​war.

The developments sent Brent futures rising more than 2% in Asian trade to $98.21 a barrel.

U.S. West Texas ⁠Intermediate crude was up slightly from Monday’s last traded price but down 4.9% from Friday’s close. There was no settlement on ​Monday due to the U.S. Memorial Day holiday.

I’m a bit sceptical. We keep being told there’s a deal that’s near, but what does ​the deal look like? That’s what’s really important. When’s the Strait of Hormuz going to open. There’s a lot we don’t know, said Joseph Capurso, a strategist at Commonwealth Bank of Australia.

Stock markets were mixed, with MSCI’s broadest index of Asia-Pacific shares outside Japan adding 0.67%, while Nikkei dropped 0.14%.

In Hong Kong, stocks rose as the chipmaking sector’s gains helped overcome jitters around Beijing’s crackdown on illegal cross-border trading. The Hang Seng Index was up 0.5%, while on the mainland, CSI300 blue-chip index slipped 0.3%.

Nasdaq ​futures trimmed earlier gains to trade 0.86% higher, while S&P 500 futures added 0.66%.

EUROSTOXX 50 futures eased 0.16%, while FTSE futures rose ​0.2% and DAX futures slipped 0.26%.

The market wants to believe that it’s all going to end soon, because the war not ending is quite bad for ⁠the world economy. The world economy’s had these buffers of running down inventories, but you can’t keep running down inventories, said Capurso.